Buying a home is one of the lifetime achievements many people strive to reach. Moving to a new home comes with a lot of excitement. However, walking the journey of home ownership is an overwhelming experience.
Home buying involves searching for the right property, and ensuring that you secure financing. However, for many first time or returning home buyers, raising the 20% mortgage down payment is an uphill task. Therefore, you would like to look for the home buying assistance programs that require low to zero down payments.
Are you buying a house in Arizona? In this post, we look at the Arizona home buying programs for first time home buyers. These first-time buyer programs will ease the experience that comes with securing financing for buying a home in Arizona.
1. The Federal Housing Administration Loan (FHA)
An FHA home loan is a mortgage that is issued by an FHA approved lender. Insured by the Federal Housing Administration, this Arizona home-buying program is for low to moderate-income borrowers.
The FHA home mortgage requires lower minimum down payments. Compared to the conventional home loan, The FHA loan is appropriate for home buyers with fair credit score. It is important to note that the Federal Housing Administration does not actually lend the money. Instead, you are borrowing from an FHA approved lender, while the FHA is the mortgage guarantor.
Requirements to qualify for the FHA Home Mortgage
- A down payment of 3.5% if the FICO Score is at least 580 / 10% if FICO Score is between 500 to 579.
- Mortgage Insurance Premium
- Debt to Income ratio of less than 43%
- Ensure the home is your primary residence
- Have a steady income and provide proof of employment
Therefore, FHA home mortgage is a good option for First-time homebuyers interested in buying a house in AZ.
2. The VA Home Loan
Are you a Veteran or service member and thinking of buying a home in Arizona? The VA home loan is one of the Arizona home buying programs you can consider. The VA helps service members, veterans, and eligible surviving spouses to own a home in AZ. The VA home mortgage was created in 1944 by the US government and it is available through private lenders or banks as authorized by the Veterans Association. Therefore, the U.S. Department of Veterans Affairs insures the VA home mortgage.
Features of the VA Home Mortgage
- Comes with a 0% Down Payment for qualified members
- No need to buy the Private mortgage Insurance since its backed by the Government
- Gives lenders a great degree of safety and flexibility hence available at a competitive rate
- Easier to qualify for compared to conventional loan
Therefore, the VA home loan is the best option for service members and veterans or surviving spouses.
3. The USDA Home Mortgage
This is a Zero-Down payment home mortgage home buyers interested in buying properties in rural areas. The USDA home loan came about as an idea to help borrowers who lack the financial muscle to buy a home, and cannot get the traditional home loan. Guaranteed by the US Department of Agriculture, the USDA home loan is designed to help develop the rural areas. Ideally, the home mortgage is designed to help those willing to buy or develop properties in selected rural areas within the United States. The home mortgage features a low interest rate while it is available at no down payment.
Requirements to qualify for the USDA backed mortgage
- Ensure you are a US Citizen
- Show proof of dependable income
- Have an acceptable credit history
- Proof that you are buying or building within the eligible areas
Therefore, if you are buying a home in Arizona but you do not have the ability to raise the high down payment, consider taking the USDA home mortgage.
4. Jumbo Mortgage
Are you planning to upgrade to a luxurious home? Jumbo home mortgage will help you to upgrade getting you into a home of your dreams. The Jumbo home mortgage is ideal for home buyers focusing on highly priced homes. Jumbo home loan provides the borrower an amount that exceeds the conforming loan limits as imposed by Fannie Mae and Freddie Mac. Generally, the jumbo home loan qualifying factors are the same as the conventional home loan. However, the mortgage features a lower down payment, while credit worthiness is less flexible. This is because the risk is higher compared to the other home mortgage options.
Arizona home buying programs are designed to help families to buy a home of their dreams. Therefore, with the options we have looked at, you are assured the ability to purchase a property that meets your requirements. Talk to a mortgage officer to evaluate the available options.